UBS Asset Management has launched its first live pilot of a tokenized Variable Capital Company (VCC) fund. This fund is part of a bigger effort called Project Guardian, led by the Monetary Authority of Singapore (MAS), which aims to put real-world assets on the blockchain. The fund operates as a smart contract on the Ethereum blockchain, allowing UBS Asset Management to handle tasks like accepting investments and processing withdrawals.
Officials from UBS Asset Management said this is a key milestone in understanding the tokenization of funds, building on UBS’s expertise in tokenizing bonds and structured products. Through this exploratory initiative, they will work with traditional financial institutions and fintech providers to help understand how to improve market liquidity and market access for their clients.
This pilot is part of UBS Asset Management’s global distributed ledger technology strategy, focused on leveraging public and private blockchains networks for enhanced fund issuance and distribution. It also forms part of the broader expansion of UBS’s tokenization services through UBS Tokenize. In November 2022, UBS launched the world’s first digital bond that is publicly traded. In December 2022, UBS issued a USD 50 million tokenized fixed rate note, and in June 2023 originated USD 27.4 million of fully digital structured notes for a 3rd party issuer.
Following the successful launch of the first pilot transactions, UBS Asset Management will be looking to execute further live pilot use cases under Project Guardian – working with a wider set of partners and explore various investment strategies.
UBS is a global wealth manager and a universal bank in Switzerland. It also provides large-scale and diversified asset management solutions and focused investment banking capabilities. UBS helps clients achieve their financial goals through personalised advice, solutions, and products. Headquartered in Zurich, Switzerland, the company has operations and offices around the globe.
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